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An investment adviser misappropriated more than $9 million from a New Jersey-based charitable foundation funded by a philanthropist’s estate, spending the money on a Porsche, Rolls-Royce, and other “lavish” items, according to recently released court documents.
John Rogicki of Little Silver, N.J., Oct. 19 pleaded guilty in New York state court to first-degree grand larceny and money laundering in connection with the theft ( People v. Rogicki , N.Y. Sup. Ct., No. SCI-03960-2017, 10/19/17 ), according to the Manhattan District Attorney’s Office. He could spend up to seven and a half years in prison and pay $9.2 million in restitution and penalties, the DA’s office said.
Rogicki was named trustee of the Kurr Foundation after the death of 97-year-old philanthropist Sara Margaret Kurr Zock in 2001, according to court documents. Zock founded the charity to support educational causes, health organizations, and youth services.
He also served as the organization’s investment adviser and controlled its account at New York-based Train, Babcock Advisors LLC, where he was managing director.
A New York Times death notice for Zock described Rogicki as “her longtime friend, advisor and confidant.”
From about February 2009 to December 2016, Rogicki stole foundation money for personal expenses, including luxury cars, vacations, and properties in Manhattan, New Jersey, and Florida, the DA’s office said. Rogicki, who also was the executor of Zock’s estate, transferred money from the charity’s account at Train Babcock into the estate’s checking account, officials said. He then moved the cash into his personal bank accounts, according to authorities.
Rogicki left Train Babcock in January. The firm disclosed in an April SEC filing that it was “fully cooperating” with an agency investigation into Rogicki.
The Securities and Exchange Commission Oct. 19 filed related civil charges against Rogicki in the U.S. District Court for the Southern District of New York ( SEC v. Rogicki , S.D.N.Y., No. 1:17-cv-08071, 10/19/17 ). The agency seeks penalties and disgorgement with interest, as well as a permanent injunction, against him.
“Rogicki’s fraud and betrayal of his client’s trust were anathema to his legal obligations and responsibilities as an investment adviser,” the SEC’s complaint said.
New York lawyer David Liston, who is representing Rogicki, told Bloomberg Law his client “accepted full responsibility for his actions.”
“We think this is a sensible resolution of the matter and serves the interests of justice,” said Liston, a Lewis Baach Kaufmann Middlemiss PLLC partner.
Rogicki is the second adviser from Train Babcock charged with a million-dollar fraud in less than a year. Brian Keenan pleaded guilty in New York state court in December 2016 to stealing more than $1.6 million from the beneficiaries of three trusts he managed at the firm.
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To view the the complaints and the DA's statement of facts, visit https://www.bloomberglaw.com//document/X1Q6NTOMKD82?documentName=1.pdf, http://src.bna.com/tyI, and http://src.bna.com/tyH.
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